The Effects of a Food Taxation on the UK’s Budget Deficit Position


Taxation in the United Kingdom can involve payment to the minimum of approximately three different levels of government. A budget deficit is referred as the twelve-monthly amount that the administration has to borrow so as to meet the deficit between the present receipts as well as state expenditure. The government of the United Kingdom need to raise the tax revenue in order to reduce the budget deficit of the country.   In this paper, I will show whether I agree with a politician or not.

I disagree with the politician that in United Kingdom, government should place a tax on all food yields since everybody must eat.  This is because it is it is unrealistic that taxation food products like non-alcoholic beverages will automatically the raise the government revenue of UK.  There are several reasons as to why taxation of foods yields will not raise government revenue. One, price elasticity. So as to generate tax revenue to the government, a tax must be applied to foodstuffs which are price inelastic (That is, products whose use lies less compared to proportionately when their cost inelastic) food product price inelastic. This indicates that effects of an increase in cost are hard to affect and may not be estimated thus, food products may not increase tax revenue. Two, effects on the other taxes. Those tax can potentially decrease other types of revenue which are paid by manufacturers, traders as well as merchants of taxed foodstuffs and their related providers and workers.

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Three, shopping over a border. The tax could also promote trans-border from buyers attempting in order to avoid the tax decrease. Taxing of food products will offer incentives to food manufacturers so that they may improve the nutritional profile of their own products thus, many people will buy, and hence it will not have effect on overall the government revenue. Four, intrinsic administrative prices. The design, observing as well as implementation of the tax could force significant administrative prices on administration making process to long, complicated as well as cannot be frugally productive as predictable.

In addition, taxation of food products may change the way people eat.  Business typically passes substantial percentages of taxes through retail cost (Borrelli, 205.p 225).  Individual eat less food as well as the drink small amount of the targeted product, thus raising the government revenues becomes expensive (Arestis, 2004.p, 74). Also, taxation of food production would be inefficient in raising the government revenues.  Products will not be able to adequately raise the government revenue without putting burdens on the economy too much.

I agree with the politician that taxes on food, vegetable, and fruits, will be applied to the grocery stores so that the low-income customers are protected. When food stores incurred a greater taxation they increase the price of food in a regular manner and so they low-income earner can only purchase what they need basically. The introduction of a tax to food especially the food which contributes to poor health is important for the rate to which they are being taken can reduce. The introduction of a tax to grocery stores will reduce the frequency to which unhealthy food contribute to our poor health.

The politician suggestion was not positively taken by the people of the United Kingdom but some people agree with him when they see the ‘?bigger picture’. This is because the seller will not allow their business to make a loss. They will distribute the value added tax to the people. This will make the prices of commodities to rise and therefore hard for the easy access to this products. When the tax is applied to seller’s unnecessary food manufacturing will increase the cost and their intake will reduce by a great percentage. The reduction of unnecessary food substances, especially unhealthy substances, will reduce, calorie which are taken every day in the United Kingdom every day (Taylor, 2017 p. 2). The groceries industries resist on the tax increase policies is done under responsibility deal which was signed in 2011 by the department of health. The tax applied to the sellers is expected to control the production of food, vegetable, and fruits, and reduce what is being produced unnecessarily.

For the government to collect enough revenue from the sellers, it should in return provide good services so that they can be motivated in paying. The government should create a good environment for the grocers to sell their products and this will ensure them enough profit and therefore they will exploiting the consumers. When the government and the sellers are associating well, taxation can benefit all of them, which include, the seller, the producer, the government and the consumers. Low-income consumers can be protected by the government if it brought back to the consumers what they have taken from the seller in form of a tax (Taylor, 2017 p. 6).

Besides groceries, the government of the United Kingdom should focus on taxing soft drinks and other sugar products. Taxing the soft drinks should raise a good revenue for the government. Moreover, this taxation will only affect the profit of the producers and the consumers will not be affected. Although in a way the consumer will be affected, the tax will be distributed evenly to all people. Taxing the soft drinks will also result in a reduction of sugar in the beverage and hence reducing the risk of getting a sugar health problem. The tax that will be collected from the production and distribution of soft drinks and sugar will be used by the government to initiate an anti-obesity initiation (Taylor, 2017 p. 2). On the expenditure budget of the government, it shows that a lot of money is required to support the obese people. Taxing sugar and soft drinks will reduce the level of obesity due to the reduction of sugar in the products as well as raising money to support the people affected. Furthermore, the food and beverages companies are not happy about the introduction of taxes on their production. They insist on the voluntary action to be taken. Companies are not willing to support the motion for they are not willing to pay an extra tax for the products they produce.


From the above discussion, it is clear that food such as fruits, alcohol and other beverages should not be taxed because of various reasons like price inelasticity thus no government revenue there are other types of foods that can be taxable like soft drinks and sugar. Therefore, taxation of some food products in the UK will increase government revenue, hence dealing with the budget deficit.


Arestis, P. and Sawyer, M., 2004. On fiscal policy and UK budget deficits. Intervention. Journal     of Economics, 1(2), pp.61-74.

Borrelli, S.A. and Royed, T.J., 2005. Government ‘strength’and UK budget deficits in advanced democracies. European Journal of Political Research, 28(2), pp.225-260.

Taylor, R. (2017). Debate: this house believes that the UK population trend in obesity cannot be reversed without food taxation.

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